Applying for an IPO online is now easy. For this, you need to have a Demat and trading account, bank account, and UPI ID. You can visit the IPO section from your mobile or computer, select a company, bid, and approve the UPI mandate. Money will only be deducted or refunded after share allotment.
An IPO (Initial Public Offering) involves a company selling its shares to the public for the first time. Investors can apply for IPOs online through their Demat and trading accounts. For this, it is necessary that your bank account has UPI activated, and you approve the payment mandate using your UPI ID. After the application is submitted, the share allotment process begins, through which investors either receive the company's shares or have their money refunded. This method makes investing from home very easy.
What is an IPO?
An IPO means a company selling its shares to the general public for the first time. This helps the company raise capital and get listed on the stock market. When an investor participates in an IPO and buys shares, they become a shareholder in that company and participate in the company's growth. Investing in an IPO gives you the opportunity to be among the company's initial shareholders, which can lead to good returns in the future based on the company's success.
Requirements for Applying Online for an IPO
To invest in an IPO, you must first have a Demat (Dematerialized) and trading account. The Demat account securely holds the shares you have purchased. Nowadays, there are many online platforms like Zerodha, Groww, and Upstox through which you can easily open an account. In addition, it is necessary to have UPI (Unified Payments Interface) activated in your bank account so that money can be blocked, and the payment process is simplified.
Process for Applying for an IPO
Applying for investment in IPOs has become easier than ever before. You can easily apply for an IPO by following the steps below from your mobile or computer:
- Log in to Demat Account: Log in to your brokerage app or website like Zerodha, Groww, Upstox, etc., with your user ID and password.
- Go to the IPO Section: After logging in, you will find the option ‘IPO’ or ‘New IPO’ in the app or website, click there.
- Select the Open IPO: There you will see a list of companies whose IPOs are open. Select the company in whose IPO you want to invest.
- Click on Apply: On the selected IPO page, there will be an ‘Apply’ or ‘Apply Now’ button, click on it.
- Enter Lot Size and Bid Price: Here you will have to specify how many shares you want to buy and at what price you are willing to pay. The lot size is determined by the company. You can enter the price within the range or choose the minimum price.
- Enter UPI ID: Enter the UPI ID linked to your bank account, which will be used to block the money. This is necessary for security.
- Approve Mandate in UPI App: As soon as you submit the application, a notification from the UPI app will appear on your mobile. Open it and approve the payment mandate (Authorization) so that the money can be blocked.
What Happens After Submitting the Application?
After the IPO application is submitted, it is closed, and the share allotment process begins. If you are successful and shares are allotted, these shares are transferred to your Demat account. If you do not get the shares, your money is refunded. This process usually takes a few days, after which you can see the share or refund information in your account.
Advantages and Precautions of IPO Investment
There are many advantages to investing in IPOs, such as buying shares at an initial price, the possibility of better returns, and the value of your investment increasing as the company grows. However, before investing, it is important to thoroughly understand the company's financial position, future plans, and market conditions.
Also, you should be aware that if there are more applications in the IPO, the share allotment is done on a lottery basis, so always invest thoughtfully. Invest only with the money you can afford to lose.
